After filing its consolidated financial statements at Dec. 31, the Société de transport de Montréal (STM) announces that its fiscal year is ending with a consolidated operating surplus for taxation purposes of $3.9 million, representing a less than 0.3 percent variance against the overall $1.4 billion budget for 2014.
"This is good news because from the very start of 2014, the STM was facing financial difficulties of over $33 million in terms of revenues. The surplus was made possible thanks to in-house efforts, which led to a reduction in operating costs. This exceptional result was achieved while maintaining the quality of bus and métro service, as well as customer satisfaction levels, which reached 89 percent at the end of the year," declared STM board Chairman Philippe Schnobb.
Such tight control over expenses has meant a freeze on hiring and staffing by mid-2014, as well as a freeze on professional services. Further savings were achieved through the improved performance of métro maintenance activities. Moreover, delays beyond the STM’s control in carrying out a number of major projects, including AZUR métro cars and iBUS, have reduced non capital expenditures for these projects. These delays have also allowed STM to postpone some long-term financing, resulting in further savings in terms of debt servicing.
"Although the consolidated financial statements being presented are showing a slight surplus for 2014 thanks to considerable efforts by the STM, these solutions are short-term and do not solve the problem. Indeed, the investments required over the next three years to maintain and renew our infrastructure total nearly 2.5 billion dollars," added Luc Tremblay, the STM’s interim CEO.
For several years now, Standard and Poor’s and Moody’s have both confirmed the quality of STM’s financial management by repeatedly giving it excellent credit ratings of A+ and Aa2 respectively, thereby allowing the STM to obtain better rates on loans.
